Insurance shopping for Warren Buffett which, through its Berkshire Hathaway announced the biggest purchase since 2016.
The maxi acquisition of Buffett
The US holding has in fact communicated the purchase of the Alleghany insurance company for 11,6 billion dollars$848,02 per share, which is a 16% premium over the average Alleghany stock price over the past 30 days.
It is a'all-cash transaction expected to be completed by the fourth quarter of 2022.
What Alleghany does
Through its subsidiaries, Alleghany is involved in one range of insurance business. “Berkshire will be the perfect permanent home for Alleghany, a company I have closely observed for 60 yearsBuffett, chairman and chief executive officer of Berkshire, said in a statement.
Alleghany chief executive Joseph Brandon - who previously led Berkshire-owned General Re - spoke of a "'fantastic transaction for Alleghany owners, businesses, customers and employees”, emphasizing that “the value of this transaction reflects the quality of our franchises and is the product of the hard work, perseverance and determination of the Alleghany team over the decades ”, according to what can be read on the CNBC website.
In this context it must be considered that Berkshire is already active in the insurance business with several companies, including General Re (reinsurance) and Geico (auto insurance). Alleghany and its units will continue to operate independently, the company statement said.
Wall Street applauds
The acquisition announcement was welcomed by investors on Wall Street. In today's session, the Berkishire stock, which closed above $500 for the first time last week, gains 2,24% above $524. Since the beginning of the year, the shares have risen by 16,6%. Fly the title of Alleghany, which travels up by 24,8% to 844,74 dollars, approaching the takeover bid price.
